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Recently, while talking at the Portsmouth High School in New Hampshire, President Obama dismissed some concerns about the health care reform the Democrats have been pushing.

Another legitimate concern, he said, was whether a public insurance plan he favors would overwhelm the private insurance system. Obama said it should not.

“If you think about it, UPS and FedEx are doing just fine,” he said. “It’s the post office that’s always having problems.”

Hmm… of the three large services that deal with moving mail–UPS, FedEx, and USPS–it is the United States Postal Service that is “always having problems.” Is it a coincidence that the USPS is also the only service managed by the government with a government monopoly on first-class mail? I don’t think so. I think the comment is a prime example of why Obama shouldn’t talk about things unless he has his teleprompter present.

The obvious follow-up question to his comment is to ask why Americans should be anxious to move from private-run health care to government-run health care when Obama’s example shows that private-run mail offers a much better service than the government-run option.

So let’s take a look at the government’s track record, based on some information sent to me recently in an email.

The U.S. Postal Service was established under Benjamin Franklin in 1775 by the second Continental Congress. It has been managed by the government for 234 years, and it is broke. It ran a $2.8 billion deficit in 2008.

Social Security was established under FDR in 1935. It has been managed by the government for 74 years, and it is broke. Worse, it is a Ponzi scheme that is inherently unstable.

Fannie Mae was established under FDR in 1938 under FDR. It has been managed and legislated by the government for 71 years, and it is broke.

The War on Poverty started under LBJ in 1964. It has been managed by the government for 45 years, and it doesn’t work. Trillions of dollars have been taken from taxpayers to go to the poor. The poverty rate in the U.S. had been falling in the decade before government stepped in, but since then, the rate has remained pretty static.

Medicare and Medicaid were established under LBJ in 1964. They have been managed by the government for 44 years, and they are broke.

Freddie Mac was established under Nixon in 1970. While a government-sponsored enterprise, it has been legislated by the government for 39 years, and it is broke.

The Troubled Asset Relief Program (TARP) was passed under Bush in 2008. $700 billion has been squandered buying up assets worth far less than that.

And most recently, the “Cash for Clunkers” program was established under Obama in 2009. The initial grant of $1 billion ran out in one month, even though the financial geniuses in the government thought it would last four times as long. So Congress approved spending an additional $2 billion in the program. To boil it down, the government paid out either $3,500 or $4,500 for cars with a trade-in worth of $1,475. This is not a wise use of our money. Oh, and it’s gone.

Government has no ability to spend money wisely or efficiently, as demonstrated by the track record it has amassed in the past century. So why should we even conceive of giving government control over America’s health care system? Many times on commercials I have heard some rapidly-spoken variation of the following phrase: “past performance is not indicative of future results.” But with the government, past performance is practically a promise of future results.

Government-run health care? History tells me that the best answer is “Thank you, but no.”

“For me it is very important that our government take a strong stand to defend all of us who decide to migrate to another country,” she said.

I could agree with this statement 100% if it had one extra word: “who decide to legally migrate to another country.” Omitting that one word makes a critical difference, since a government is to protect the legitimate and legal actions of the people.

But omitting the fact that she broke the law multiple times, Arellano is now trying to excuse her actions by telling people that the United States broke the law first.

“The United States is the one who broke the law first. By letting people cross over without documents. By letting people pay taxes.”

Ah. Let’s examine this logic. So if there isn’t a guard stationed at the back door of a bank, then it’s the bank’s fault, not the robber’s, that he broke through the door and got into the vault. One word summarizes this logic: mierda. While I certainly agree that the U.S. should do much more to lock down our borders, an unguarded border does not grant permission to people to pass over unlawfully.

As for paying taxes, it can certainly feel like a crime at times, but Arellano has it exactly backwards. Not paying taxes is breaking the law. If you work in the U.S., legally or not, the government wants and demands its take from your wages. Paying your taxes does not grant you any legitimacy if you broke the law getting here. And don’t forget that Arellano was arrested for using a Social Security number that was not her own. So how can Arellano say that the U.S. broke the law first, when it was she who stole a Social Security number first?

Frankly, I don’t accept the “they did it first” argument when it comes to breaking the law. Someone else breaking the law doesn’t grant you permission to break the law yourself. In any case, I don’t accept Arellano’s premise that it is the U.S. who broke the law first. But I suspect Arellano will continue with this nonsense claim in her attempt to play the victim card. And yet I find it ironic that Arellano went to the Mexican Senate to plead her case when Mexico’s immigration laws are harsher than ours, and they have their own problems on their southern border.

MLMs don’t work in the long run because they are fundamentally unstable pyramid schemes. You buy into the program, get some other people to buy in under you, then they get others to buy in under them, etc. It doesn’t take very long to realize that the numbers don’t work. Let’s play with a simple pyramid, with each participant getting 10 people below them, and calculate how many people are added in each iteration of the MLM.

1st

1

2nd

10

3rd

100

4th

1,000

5th

10,000

6th

100,000

7th

1,000,000

8th

10,000,000

9th

100,000,000

10th

1,000,000,000

11th

10,000,000,000

At the 11th iteration, we have reached a total of over 11 billion people in the MLM. Since that is obviously greater than the current population of Earth, you can see that a simple MLM can swiftly grow faster than the available number of people on the planet. You could artificially limit growth by allowing only four people in a participant’s downstream group, but this only prolongs the inevitable growth. If you limited each iteration to four times the size of the previous one, you would grow past the human population in the 14th iteration, only three more than in the example above. All of this assumes that the widget or service sold by the MLM is something that every living person wants and will buy. There isn’t a single item on earth that everyone is willing to purchase–not even water. If you don’t believe me, do your best to come up with one and let me know.

Pyramid schemes are not anything new. These schemes are sometimes referred to as “Ponzi schemes,” after Charles Ponzi who developed a huge investment scheme in 1919-1920 before it blew up, as these schemes inevitably do. While it was possible for investors to make fantastic profits after 45 or 90 days, Ponzi constantly relied on a new influx of investors to pay off the previous ones whose payments were coming due. A modern revival of the Ponzi scheme is the “make money fast” letters and emails that continuously make the rounds on the Internet. Most of these never get anywhere, but sometimes these schemes have disastrous effects, such as the Ponzi scheme that trashed the nation of Albania in the 1990s.

We may scoff at how the Albanians fell victim to a Ponzi scheme, but here in the United States we have our own inherently unstable pyramid called Social Security. Some have argued that Social Security doesn’t qualify as an actual Ponzi scheme, but there can be no argument that Social Security relies on the money from current workers to pay benefits for previous generations. Back when President Roosevelt started Social Security, there were sixteen wage earners for every person receiving benefits. The current ratio is about three workers for each recipient, and the number of wage earners continues to drop. This ain’t good.

Here is what the President said in his State of the Union address:

The best way to keep Social Security a rock-solid guarantee is not to make drastic cuts in benefits, not to raise payroll tax rates, not to drain resources from Social Security in the name of saving it. Instead, I propose that we make the historic decision to invest the surplus to save Social Security.

Specifically, I propose that we commit 60% of the budget surplus for the next 15 years to Social Security, investing a small portion in the private sector just as any private or state pension would do. This will earn a higher return and keep Social Security sound for 55 years.

This declaration was greeted with applause and cheers by the audience. The catch is
that I just quoted President Clinton’s 1999 State of the Union address. When President Bush
pointed out the oncoming collapse of Social Security in his 2005 State of the Union address, the Democrats who had cheered President Clinton on the same subject only six years before, instead muttered, griped, and complained that the President was being reactionary. I’ve created a 85kb mp3 sound file of the Democrats grumbling during President Bush’s speech. It seems the Democrats no longer agree that Social Security is a looming disaster, though they lauded President Clinton’s call for a similar fix.

Social Security has been called the “third rail” of politics; similar to the electrified third rail used in subway systems, anyone who as much as touches this political topic is in for a great shock. But is Social Security a good deal? If it were to be proposed today, it would never be accepted by the people. Don’t believe me? Would you agree to an insurance policy that would generate less than a 2% growth of your investment, and at your death the unspent balance goes not to your beneficiaries, but reverts to the government to be spent as it sees fit? If you are honestly excited about such a deal, I want to sell you your next car.

I could almost like Social Security if the money I was earning were to go into a secure account with an interest rate of 2% over inflation. You could think of it as a forced savings account. The problem is that there is no trust fund or lockbox on Social Security money. At the moment there is more money going into Social Security than is needed to pay current expenses, but rather than setting the extra money aside to earn interest, government officials have taken the money and spent it. In its place they have been writing IOUs, promising to pay back the money at some future date. And that date never comes. As P. J. O’Rourke said, “Giving money and power to government is like giving whiskey and car keys to teenage boys.”

So what will you see in the next few months? President Bush and the Republicans will push for ways to make Social Security better, and Democrats will vilify and nay-say every idea they bring up. After all, it will be easier for the Democrats to bury their heads in the sand and pretend that the pyramid scheme we call Social Security will continue to be a rock-solid investment — as solid an investment as Charles Ponzi’s Securities Exchange Company ever was.

That is a phrase often spoken by people in the press or our elected officials as they press the flesh in their attempt to be re-elected. But once they are voted into office, how much do they really uphold it?

Section 8 of the first Article in the U.S. Constitution outlines the responsibilities of Congress. If it is not listed in that section, Congress does not have the responsibility or authority to pass laws about it. Unless you have read that section within the last week, please click on it and read it now. I will wait right here until you are finished.

Done? Good. Did you read anything in there about education, welfare, or the environment? What about Social Security, Medicare or Medicaid? Did you notice that none of these programs are listed in the Constitution as responsibilities of the federal government? Each time people are sworn into the House or Senate, they swear or affirm to defend and protect the Constitution. But each law they pass without a constitutional mandate is another blow to our Constitution as the law of the land. Each time they pass a law without the authority to do so, they prove that their oaths to support the Constitution are just so much legislative hot air.

Here is another case in point. Jim Abrams, a writer for the Associated Press, wrote an article titled “Senate approves pay increase for itself” on Oct. 23. In this article, he points out that Congress will receive a pay increase during 2004, rising from $154,700 to $158,000. In a 60-34 vote on Thursday, the Senate rejected a proposal that would exempt it from a cost of living adjustment (COLA) targeted to all other federal workers and military personnel. In the previous month, the House rejected a similar proposal to exempt itself from this COLA.

As much as I dislike the other political ideas and actions of Democrat Senator Russ Feingold of Wisconsin, I admire him for standing up against this COLA. He pointed out that in the last five years, the Senate has seen increases totaling $21,000–quite a nice sum. Sen. Feingold even went as far as to suggest that anything above his starting salary of almost six years ago should be returned to the Treasury. In this situation, I admire Sen. Feingold’s stand much more than that of Republican Senate Majority Leader Bill Frist. “I think that our representatives of government deserve a pay raise consistent with the work that we’ve produced,” he said. Do you, Senator? Then draft specific legislation that will give you this well-deserved pay raise. Do not continue this back-door method of getting more money.

It must be pretty nice to be able to approve your own pay raise. However, there is a little snag in this rosy plan: the Constitution. The 27th Amendment, ratified in 1992, says, “No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.” This means that any raises or cutbacks to members of the House or Senate do not take effect until after the national November elections for Representatives. Since 2003 is not such a year, this COLA should not take effect until at least Wednesday, November 3, 2004. But this pay increase is scheduled to take effect with the first paycheck written by the U.S. Treasury in January 2004, because the majority of the people serving in the House and Senate are more interested in making a few thousand dollars more each year than in honoring their oaths to “support and defend the Constitution.” Nor is the Legislative Branch willing to “bear true faith and allegiance” to the document it pretends to revere.

“This is not a pay raise. This is an increase that’s required by law,” said Constitution-ignoring Republican Senator Ted Stevens, the Senate Appropriations Committee chairman from Alaska. He obviously wants the money more than he cares to honor the Constitution. Since this law automatically increases the pay of the Senate and House, it cannot legally take effect until November 2004, but Sen. Stevens has already turned a blind eye to the Constitutional requirement by ignoring the very nature of this pay increase. A rose is still a rose, even if you call it a shovel, Senator. And this cost of living increase will raise your pay; therefore, it is a pay raise. To quote Conan O’Brien, “Duh!”

Democrat Senator Joseph Biden of Delaware voted against the Feingold measure. He called this a “no-win situation under any circumstances” since the people would not accept any dollar amount for a pay increase for the Legislature. Well, if the Legislature can point out the many wonderful work it has completed in the past year, the people will stand behind the increase. But since the nation has been economically rocky for the last few years, just how happy do you think the public will be to view these legislators increasing their paychecks at the expense of families just trying to find work or make ends meet?

I am not all that concerned about the amount of money involved. When you consider just how much power a Senator or Representative has, it is amazing just how little he or she is paid. The leaders of large business corporations, who have much less power to affect our daily lives, are paid many times more than anyone in government. Even the President is only paid $400,000 a year, and he is the leader of the greatest nation on Earth! My primary concern is over the all-too-common disregard for Constitutional authority. The Constitution gives the government the power and permission to act, and when members of the Legislature vote to line their pockets and no one stands up for the 27th Amendment, I realize just how forsworn our elected leaders are.

Each time the Legislature passes another law dealing with welfare, education, or the environment, it is collectively thumbing its nose at the Constitution. So we should not be surprised when in a few months, the Legislature will start cashing larger paychecks regardless of Constitutional amendments against it. Senators and Representatives have shown that the Constitution usually stands in their way, and they do not care if the people see them do this. They know we are too involved with “The Next Joe Millionaire” to care about the unconstitutional acts of our elected leaders. Shame on them, and shame on us.